project report on escort tractors
TRANSCRIPT
Estimation of Financial Strength of Escorts.
Presented to:
Mr. Sunil Buddhiraja,Presentation Incharge
Presented by:
Narender Dagar,Reg. No. 10904044RS1903A23
Objective Of The Study
To assess the long-term and short-term financial soundness of the
company.
To make a comparison of Escorts
performance with its competitors.
To evaluate current performance of the company and comparing it with its past performances
To find out various reasons which are responsible for the differences in the performance of Escorts and its competitors.
Introduction to the Project
financial position of financial position of
the company on the the company on the
basis of ratio analysis.basis of ratio analysis.
financial position of financial position of
the company on the the company on the
basis of ratio analysis.basis of ratio analysis.
the financial position the financial position
of the company is of the company is
measured by making measured by making
comparison with its comparison with its
competitorscompetitors
the financial position the financial position
of the company is of the company is
measured by making measured by making
comparison with its comparison with its
competitorscompetitors
Two methods are adopted to estimated the strength
of escorts
Cont……….
Introduction to Escorts
In 1960, Escorts set up the strategic Agri Machinery Group (AMG) to venture
into tractors.
In 1960, Escorts set up the strategic Agri Machinery Group (AMG) to venture
into tractors.
In 1965, the company rolled out its first batch of tractors under the brand name of
Escort.
In 1965, the company rolled out its first batch of tractors under the brand name of
Escort.
In 1969, a separate company Escorts Tractors
Ltd. was established
In 1969, a separate company Escorts Tractors
Ltd. was established
1996, Escorts Tractors Ltd. formally merged with the parent company Escorts
Ltd.
1996, Escorts Tractors Ltd. formally merged with the parent company Escorts
Ltd.
Escorts AMG has three recognized and well accepted
tractor brands
Scope of the study
The ability of the firm to meet
current obligation
The ability of the firm to meet
current obligation
The extent to which firm has used its
long term solvency by borrowing funds.
The extent to which firm has used its
long term solvency by borrowing funds.
The efficiency to which firm is utilizing
its assets in generating sales
revenue.
The efficiency to which firm is utilizing
its assets in generating sales
revenue.
Firm utilizing the overall operating
efficiency and performance of the
firm.
Firm utilizing the overall operating
efficiency and performance of the
firm.
Research Methodology
Research Design
Research Design
Exploratory+
Descriptive
Exploratory+
Descriptive
Methods ofData collection
Methods ofData collection
Primary Data Primary Data
Secondary Data
Secondary Data
observations
newspaper
Journals
websites
Research Methodology cont.
SampleSize
SampleSize 4 Companies4 Companies
PresentationPresentationBar- diagram
Pie chartsGraphs
Bar- diagramPie chartsGraphs
Review Of Existing Literature
SOURCE 1
http:// www.escorts.com
Balance
Sheet of
different
years
Balance
Sheet of
different
years
Internal
data of the
company
Internal
data of the
company
Annul
Reports of
the escorts
Annul
Reports of
the escorts
Ratio Analysis
•A ‘ratio’ is defined as the indicated quotient of two mathematical expressions and as the relationship
between two or more things •Ratio analysis involves comparison for a useful
interpretation of the financial statements
Types of Ratio:-
RATIO ANALYSIS OF ESCORTS
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Curent ratio 1.04 1.03 1.15 1.27 0.97 1.12 1.13
Quick ratio 0.75 0.83 0.89 0.97 0.7 0.84 0.85
sep'05 sep'06 sep'07 sep'08 sep'09 sep'10 sep'11
CURRENT AND QUICK RATIO:-
Projected ratios for year 2010 and 2011 by using method of ‘Least Square’.
Equations for regression line or trend line
using time series: Current ratio : Y = 1.09 + 0.011 X (where
X=3, 4 for 2010 & 2011 respectively in all cases)
Quick ratio : Y = 0.83 + 0.004 X
0
2
4
6
8
10
12
14
creditors turnoverratio
4.32 4.16 3.85 3.99 3.62 3.54 3.39
debtors turnoverratio
5.89 7.46 6.18 4.07 5.09 4.24 3.74
sep'05 sep'06 sep'07 sep'08 sep'09 sep'10 sep'11
Debtor turnover ratio : Y = 5.74 – 0.5 X Creditors turnover ratio : Y = 3.99 – 0.15 X
CURRENT RATIO:-
0
1
2
3
4
5
6
escorts ltd. 1.04 1.03 1.15 1.27 0.97
mahindrra & mahindra 1.51 1.48 1.48 1.23 1.02
HMT 5.29 4.77 5.1 3.59 3.65
VST Tillers 1.83 1.5 1.54 1.56 1.71
sep'05 sept'06 sept'07 sept'08 sept'09
COMPARATIVE ANALYSIS OF ESCORTS WITH ITS COMPETITORS
COMPARISON OF GROSS PROFIT RATIOS OF DIFFERENT COMPANIES WITH ESCORTS
-50%
0%
50%
100%
VST Tillers 10.21 11.17 13.74 11.54 15.34
HMT -4.73 0.56 -2.32 -29.21 -38.3
mahindrra &mahindra
12.8 12.48 14.73 8.12 6.1
escorts ltd. -18.96 1.32 3.3 3.17 7.42
sep'05 sept'06 sept'07 sept'08 sept'09
COMPARISON OF NET PROFIT RATIOS OF DIFFERENT COMPANIES WITH ESCORTS
-60
-40
-20
0
20
escorts ltd. 3.08 1.08 -0.31 0.59 4.16
mahindrra &mahindra
7.85 10.73 11.12 10.21 6.62
HMT 1.88 3.67 16.09 -18.41 -40.84
VST Tillers 4.42 5.72 7.65 7.55 10.41
sep'05 sept'06 sept'07 sept'08 sept'09
Limitation of the study
Excessive carriage of Excessive carriage of inventory over the inventory over the
normal levelsnormal levels
Excessive carriage of Excessive carriage of inventory over the inventory over the
normal levelsnormal levels
Working capital Working capital problems will arise problems will arise
when there is a slow – when there is a slow – down in collection of down in collection of
debtors.debtors.
Working capital Working capital problems will arise problems will arise
when there is a slow – when there is a slow – down in collection of down in collection of
debtors.debtors.
Sometimes capital Sometimes capital goods will be goods will be
purchased from the purchased from the funds available for funds available for
working capitalworking capital
Sometimes capital Sometimes capital goods will be goods will be
purchased from the purchased from the funds available for funds available for
working capitalworking capital
Unplanned production Unplanned production schedules will cause schedules will cause
excessive stocksexcessive stocks
Unplanned production Unplanned production schedules will cause schedules will cause
excessive stocksexcessive stocks
Dependence in short term sources of
finance
Dependence in short term sources of
finance
Recommendations
Investments: Investments: The The Company has invested Company has invested
in various fields which is in various fields which is good as it has diversed good as it has diversed
its risk.its risk.
Investments: Investments: The The Company has invested Company has invested
in various fields which is in various fields which is good as it has diversed good as it has diversed
its risk.its risk.
Market share: Market share: The The Company’s main Company’s main
motive should be to motive should be to increase their market increase their market
share.share.
Market share: Market share: The The Company’s main Company’s main
motive should be to motive should be to increase their market increase their market
share.share.
Collection Collection period: period: Escorts Escorts should have to should have to
reduce its credit reduce its credit periodperiod
Collection Collection period: period: Escorts Escorts should have to should have to
reduce its credit reduce its credit periodperiod
►Proper training: Proper training: The The personnel must be given personnel must be given training for proper use of training for proper use of equipments and materials equipments and materials so as to avoid damagesso as to avoid damages
►Proper training: Proper training: The The personnel must be given personnel must be given training for proper use of training for proper use of equipments and materials equipments and materials so as to avoid damagesso as to avoid damages
►Payment policies: Payment policies: Payment policies Payment policies followed by Escorts followed by Escorts should be reviewed should be reviewed time to time.time to time.
►Payment policies: Payment policies: Payment policies Payment policies followed by Escorts followed by Escorts should be reviewed should be reviewed time to time.time to time.
CONCLUSION
The company has improved its The company has improved its performance very well as compared performance very well as compared to its previous year’s ratiosto its previous year’s ratios. .
The company has improved its The company has improved its performance very well as compared performance very well as compared to its previous year’s ratiosto its previous year’s ratios. .
Escorts is still in backward position if compared it Escorts is still in backward position if compared it with Mahindra & Mahindra and VST Tillers.with Mahindra & Mahindra and VST Tillers.
Escorts is still in backward position if compared it Escorts is still in backward position if compared it with Mahindra & Mahindra and VST Tillers.with Mahindra & Mahindra and VST Tillers.
►continuous improvement of Escorts is also giving them a continuous improvement of Escorts is also giving them a tougher competition and will definitely acquire a better position tougher competition and will definitely acquire a better position in the future.in the future.
►continuous improvement of Escorts is also giving them a continuous improvement of Escorts is also giving them a tougher competition and will definitely acquire a better position tougher competition and will definitely acquire a better position in the future.in the future.
Time To Ask Questions….!!!